Two experts of the Agrosilvic Biodiversity Study & Research Center “Acad. David Davidescu”, Univ.Prof. Gabriel Popescu and PhD Eng. Ioana Corina Moga, have recently published an interesting article in Business Press Agricol magazine, in which they do an analysis of the competitiveness of the Romanian dairy farmers, compared to their EU fellow farmers.
Importance of the livestock sector
The authors describe the livestock sector as playing an essential role in ensuring food security in the EU, maintaining the economic balance of rural areas, and supplying value-added food products. According to Eurostat data (2023), animal husbandry accounts for approximately 40% of the total value of agricultural production in the EU-27, and dairy cattle are a central pillar of this ecosystem, with over 20 million heads raised on commercial farms.
Countries such as Germany, France, the Netherlands or Poland stand out for their high efficiency, superior yields per animal, and advanced level of farm technology. For example, average milk production in Germany and the Netherlands exceeds 9,000 litres/head/year, while the European Union average is around 7,300 litres/head/year (European Milk Market Observatory, 2023). These results are the consequence of continuous investment in genetics, nutrition, automation and digitization.
Lagging behind competitiveness
In contrast, Romania, although it has considerable natural resources, is struggling to become more competitive and achieve similar results. Although the cattle sector has stabilized in recent years, it is still characterised by a low degree of economic concentration and low technological efficiency. The data of the National Statistics Institute (INS, 2023) show a decline in the cattle population from 2.5 million head in 2007 to approximately 1.85 million in 2023, of which only around 20% are raised on commercial farms. Average milk production per head is between 4,000 and 5,500 litres/year - significantly below the European average.
Technical gap
Unfortunately, one of the most visible gaps between Romania and Western European countries is the level of technical equipment. According to a report by the Ministry of Agriculture and Rural Development (MADR, 2022), only 15-18% of commercial dairy farms in Romania use automated milking systems, and less than 10% have equipment for monitoring the microclimate. In contrast, in Germany, the Netherlands, and Denmark, the digitization of all processes - including herd management, automatic ventilation, and feed monitoring - is already a common practice on medium and large farms.
Competitive advantages
However, in the opinion of the authors, Romania has competitive advantages which, with a coherent valorisation strategy, could be converted into sources of progress. These include: the availability of large feed resources (13 mln ha of agricultural land), relatively low labour costs, access to European funds, and the growing demand for local dairy products with guaranteed traceability. In order to turn these advantages into real economic gains, the process of technological modernization needs to be accelerated.
Structural challenges
Looking deeper, the challenges facing Romanian farmers are multiple and structural in nature. The small size of farms, low level of capitalization, insufficient use of technology, and limited access to digital innovations considerably limit their competitiveness.
Romania accounts for approximately 33.5% of the total number of agricultural holdings in the EU, but most of these are small, with an average size of 4.4 ha/holding, compared to the EU average of 15 ha/holding (Eurostat, 2023). This fragmentation reduces economic efficiency and makes it difficult to attract significant investment. For example, while in France or Germany an average farm operates with over 100 dairy cows and uses automated equipment, Romania has over 134,000 small dairy farms (under 10 heads), many of which are below the profitability threshold (MADR, 2022).
An EU comparison
Overall economic performance confirms these differences. A study published in the “Sustainability” magazine (2023) compared key indicators between EU countries, showing that Romanian farms have a Farm Economic Sustainability Index (FESI) of EUR 29,262, compared to the EU average of EUR 41,529. In terms of the Farm Capitalization Index (FCI), Romania stands at 13.8, while the European average is 18.96 - reflecting significant differences in technical equipment. Similarly, the Profitability and Cash Flow Index (PCFI) varies in Romania between 118% and 136%, below the level recorded in other countries (137%-157%), indicating lower liquidity and limited self-financing capacity.
Digitization
The level of digitization is also a critical factor. Only 15-18% of commercial cattle farms in Romania use automated milking equipment, and less than 10% have microclimate monitoring systems, while in countries such as Germany or the Netherlands these technologies are present in over 60% of farms. In addition, tractor density is another relevant indicator: in Romania there is 1 tractor per 54 ha, compared to 1 tractor per 13 ha in Western European countries, reflecting low productivity and high dependence on manual labour (European Commission, 2022).
The digitization process is also slowed down by cultural and institutional factors. Research highlights the major obstacles faced by small farms in Romania in adopting Agricultural Digital Solutions (ADS): high initial costs, lack of digital skills, and insufficient institutional support. Studies show that Romanian farmers' reluctance to adopt smart technologies is influenced by low levels of technical education, but also by the lack of functional local examples to encourage change.
Farmers’ position on the market
In addition, market positioning is often unfavourable. Large farms in Western Europe are integrated into efficient processing and distribution networks, while most farms in Romania sell milk as a raw material at low prices, without their own processing capacity. This dependence limits the added value captured by farmers and increases their vulnerability to market fluctuations.
Financial position
Romania is not in an advantageous position in terms of financial support either. The ratio of subsidies to income is 107%, below the EU average of 121%. Worse still, less than 30% of European funds are converted into productive investments, compared to over 45% in farms in developed countries.
Conclusion: the only way is up!
The conclusion of the authors is that all these structural, technological, and institutional differences lead to an unequal competition within the EU market. Without a coherent modernization plan, Romanian farmers risk remaining stuck in an uncompetitive economic model that is vulnerable to external shocks and unable to meet increasingly stringent standards on quality, safety, and sustainability.
For the new Romanian government, the livestock sector is considered a priority. We will keep on following and exploring the developments in this and other promising sectors, and pinpoint opportunities for NL-RO cooperation.
Interested in the Romanian market opportunities? See also: Agrifood Trade Mission to Romania and ‘Dutch Day at Indagra Fair’ | Nieuwsbericht | Agroberichten Buitenland